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Explain why mandatory outlays are predicted to grow (as a portion of the total budget) over the next decade.
Explain the difference between average tax rates and marginal tax rates. Is it possible for a person’s average tax rate to equal his or her marginal tax rate?
Analyze what is missing from this argument? Name five poor nations that have significant natural resources.
Describe the pattern of world economic growth over the past 2,000 years. Approximately when did economic growth really take off?
Discuss what are the three factors that influence economic growth? How is economic growth measured?
Illustrate the effect of default risk on the price of a bond. What is the interest rate on a one-year $100,000 bond that sells for $97,000?
How will demand be affected if a ratings agency upgrades your bond rating to AA? How will the ratings upgrade affect the price of your bond?
Draw supply and demand curves for your iPong bonds. Label the supply curve S, the demand curve D, and the equilibrium price p.
What is the interest rate on a one-year Ford bond with a face value of $5,000 and a price of $4,750?
What is the rate of return on the one-year Toyota bond? The rate of return of a $1,000 one-year Ford bond must be: less than the return on the Toyota bond.
Why might a firm prefer to finance its investments with bonds rather than stocks? Alternatively, why might a firm prefer stocks to bonds?
If people worried about the United States defaulting on the national debt, what would you expect to happen to interest rates on U.S. Treasury securities? Why?
What is the difference between direct and indirect finance? Discuss the reasons why a firm (a borrower) might choose each method.
How would this change affect the equilibrium interest rate and investment? In the long run, how would this affect real GDP in the United States?
Given your answer to part (a), what can you say about the level of investment in Wahooland relative to that in Wildcat Island in 2015?
Disucss what will happen to the interest rate in that nation? What will happen to the equilibrium level of investment in that nation? Explain your answers.
List the factors that affect the supply side of the loanable funds market. Which factor(s) determine the slope of the supply curve?
What happens to the national savings rate when the allocation of retirement funds shifts as you describe in your response to part (a)?
All else equal, what does a lower interest rate mean for firms? What does a lower interest rate mean for savers?
If healthcare costs make up 10% of total expenditures and they rise by 15% while the other components in the consumer. by how much will the price index rise?
Suppose that the residents of Greenland play golf incessantly. What was the CPI for each year? What was the inflation rate in 2011?
How much would you need to have earned in January of this year to have at least as much real income as your grandmother did in 1964?
How much has the entire index changed in the past year? Now pick out the five individual categories that have increased the most in the past year.
If I Had a Million Dollars. How much money would the group need in 2012 to have the same amount of real purchasing power in 2012?
If a country is experiencing a relatively high rate of inflation, what impact will this have on the country's long-term rate of economic growth?